Planning for a Not-for-Profit Combination

Insight into Federal, State, and Funding Considerations

Daniel D. Acton, DBA, and Karyl Mammano, PhD, and Colleen Fagan, CPA

Adecline in grants and donations, brought on by the weak economy, has prompted many not-for-profit organizations to consider a combination as part of their strategic planning processes. This trend has been seen in small, voluntary nonprofits, as well as large organizations, colleges, universities, and healthcare systems. Recent reports indicate that donations from individuals are rising, whereas donations from foundations and corporations remain flat (“Nonprofits Strategize to Help Them Cope with a Perilous 2011,” Nicole Wallace, Chronicle of Philanthropy, January 13, 2011). Organizations receiving governmental contracts are facing a strain as states reduce expenditures to close large budget gaps. Reductions in spending and staff cuts have not been sufficient to offset declining cash inflows, which has led many not-for-profit organizations to consider combining with another not-for-profit organization in order to stay “alive.”